MIS credit provisions weigh on 2021 profit, earnings set to improve: Vice Chairman

Ibrahim Al-Moammar, Vice Chairman

Al Moammar Information Services’ (MIS) credit provisions of SAR 15 million mainly contributed to 2021 profit decline despite recording strong operating profits, Ibrahim Al-Moammar, Vice Chairman, told Argaam via a phone call.

The net profit before provisions amounted to SAR 26 million during the same fiscal year, Al-Moammar added.

“We expect collection to improve in the next period, which will contribute to decreasing and reversing some provisions,” he said.

The total volume of the company's loans reached SAR 370 million, and the available credit lines stood at SAR 2 billion, the Vice Chairman said, expecting a slight impact from the high interest rate on costs due to obtaining better terms from the lenders.

Commenting on the capital increase to SAR 300 million, Al-Moammar said the firm seeks to strengthen its capital base to support its business and expansion plans. MIS continues with the policy of cash dividend and capital increase through capitalizing the retained earnings and reserves until reaching the target capital over the next three years, he added.

He pointed out that the total value of new projects reached nearly SAR 1.5 billion during the first quarter, including SAR 1.2 billion for the data centers project and the remaining for various projects.

“The financial impact depends on the implementation period,” Al-Moammar said.

He expects the company to win several projects and record robust profits in 2022, noting the difference in profits from one quarter to another.

Further, the top official expects MIS to post positive financials for 2022, as the value of contracts and business in progress amounts to SAR 2.5 billion, which is the highest level in the company's history.

This would contribute to achieving strong profit growth, which will reflect positively on the company’s overall performance and financial position.

Touching on the developments of establishing a Fintech company, Al-Moammar said the development of products is proceeding as scheduled, and three products will be launched in late H1 2022 and early H2 2022, after obtaining the necessary licenses from the competent authorities.

The development of all apps and products, such as Buy Now, Pay Later; Open Banking; and E-Market Place is in progress, Al-Moammar concluded.

MIS reported a net profit after Zakat and tax of SAR 56.5 million for 2021, a drop of 34% from SAR 85.1 million a year earlier.